Markets & Finance

Bonds Lower

December 21, 2004

INFORMA: Treasuries endured a choppy day of trading on Wednesday and the lack of liquidity added to the volatility. Dealers noted that desks were already half staffed, and with Tokyo closed until after Christmas the lull began overnight. Asian players booked profits in TIPS. Third-quarter GDP final revisions at 4% was right in line with expectations and largely ignored by the bond market. The Fed's annual revision of industrial capacity was upped to 78.7%, up by 1.1 points so Treasuries lost. As weekly oil inventory data was positive, and oil subsequently fell by $2s (at one point), Treasuries turned south.